Mazda Motor Corp <7261.T> is looking to raise up to $2 billion in a bigger-than-expected public share offering, a regulatory filing showed on Wednesday, which would cause a massive 69 percent dilution of its existing shares.

The share offering eclipsed expectations of 100 billion yen that had been flagged by financial sources. If the overallotment portion of the offer is excluded, Mazda would be raising 147 billion yen ($1.8 billion)and dilution would be 62 percent.

The loss-making Japanese automaker, which is seeking to fund a new plant in Mexico, as well as ventures in Russia and Southeast Asia, also said it will seek 70 billion yen in subordinated loans.

Battered by a strong yen, the nation's No.5 automaker is set to post its fourth straight annual net loss in the financial year to March. This month it predicted red ink of 100 billion yen, much worse than an earlier estimate of a 19 billion yen loss.

A Mazda official said the company has no plans to hold a news briefing.

Mazda, which makes the Mazda2 subcompact and the Mazda3 compact car, is the most exposed among Japanese automakers to currency swings, building about 70 percent of its vehicles in Japan and exporting 90 percent of those last year.

Other capital expenditure plans for the Hiroshima-based company include the introduction of its next-generation engine and transmission technology on all its cars by around 2016.

Mazda shares ended 1.4 percent higher before the announcement, after tumbling 10 percent on Tuesday on reports about the capital raising plans. ($1 = 79.7500 Japanese yen)

(Additional reporting by Nobuhiro Kubo, and Miki Kayaoka; Editing by Edwina Gibbs)

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